The details of the scientist-turned-CEO's first act are well known: founding ImClone, the maker of the cancer drug Erbitux, then insider trading charges and a five-year prison term—a scandal that also brought jail time for his friend Martha Stewart.

Waksal emerged from prison in 2009, the year after ImClone was sold to Eli Lilly for $6.5 billion. He's since raised $500 million in debt and equity and founded a new drug company, Kadmon, a closely held firm he's led as chairman and CEO.

As part of his sentence, Waksal was barred permanently by the Securities and Exchange Commission from serving as an officer or director of any public company.

The SEC ban is still in place. Waksal's brother, Harlan, will join the company as president and CEO, while Sam said his title will be chief of innovation, science and strategy. He said he'll also be chairman.

Waksal declined to comment further, including on whether the bar on his serving as a director of a publicly traded company still holds.

"The market does tend to believe in second chances, so given his track record and given the desire for new drugs coming to market, I'd say investors are certainly willing to give him a chance," said Les Funtleyder, portfolio manager with Esquared Asset Management and author of Healthcare Investing. "And certainly the more financial-minded will remember ImClone ultimately got acquired by Lilly; it was very successful and a lot of people made money."

Waksal founded Kadmon in 2010. The company, which is based in the same building along the East River in Manhattan as ImClone, sells drugs for hepatitis C and is in development for treatments for cancer and infectious and autoimmune diseases. Its most advanced experimental program is a drug called KD019, with planned late-stage trials in non-small cell lung cancer, according to its website.

Waksal is likely to face scrutiny from the SEC, said Jacob Frenkel, a white collar crime specialist with the law firm Shulman, Rogers. Frenkel said it's reasonable, though, to expect Waksal will be careful not to cross lines that would put him in jeopardy of violating SEC sanctions. The SEC declined to comment.

Harlan Waksal has been out of the limelight in recent years. The brothers founded ImClone in 1984, and Harlan was chief operating officer and then CEO before leaving the company in 2003, just before Erbitux was approved. He runs a consulting business and is chairman of Sevion Therapeutics, a small firm formerly known as Senesco Technologies. He wasn't immediately available for comment.

The troubles at ImClone came in late 2001, when the Food and Drug Administration rejected the company's application for approval of Erbitux. Waksal's insider trading charges stemmed from trying to sell stock and communicating with family members in the days before the FDA news, according to the SEC. On the drug's rejection, ImClone's stock sank 16 percent.

Stewart also sold ImClone shares, based on information illegally gleaned from her broker, Peter Bacanovic, according to theSEC. She served five months in federal prison and time on house arrest.

Kadmon's potential IPO would follow a record string in the biotechnology industry, which has been enjoying a market not seen since 2000. In the year-to-date period, the Nasdaq Biotechnology Index has gained 20 percent, compared with a 7.3 percent increase for the Standard & Poor's 500.

(UPDATE: This story was updated to add comments from Les Funtleyder and Jacob Frenkel.)